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The Impact of Outsourcing to China on Hong Kong's Labor Market

The Impact of Outsourcing to China on Hong Kong's Labor Market Abstract We measure the impact of China's decision to open its economy in 1980 on outsourcing from Hong Kong and the relative demand for less-skilled workers. We show that the relative demand for skilled workers in Hong Kong increased at the same time outsourcing to China began to increase. The reallocation of workers from manufacturing to “outsourcing services” can account for 15 percent, and increased utilization of skilled workers within manufacturing industries for 30 percent, of the aggregate relative demand shift. In addition, the rate of skill upgrading has been greater in manufacturing industries that have seen a greater degree of outsourcing to China. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Economic Review American Economic Association

The Impact of Outsourcing to China on Hong Kong's Labor Market

American Economic Review , Volume 95 (5) – Dec 1, 2005

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Publisher
American Economic Association
Copyright
Copyright © 2005 by the American Economic Association
Subject
Shorter Papers
ISSN
0002-8282
DOI
10.1257/000282805775014272
Publisher site
See Article on Publisher Site

Abstract

Abstract We measure the impact of China's decision to open its economy in 1980 on outsourcing from Hong Kong and the relative demand for less-skilled workers. We show that the relative demand for skilled workers in Hong Kong increased at the same time outsourcing to China began to increase. The reallocation of workers from manufacturing to “outsourcing services” can account for 15 percent, and increased utilization of skilled workers within manufacturing industries for 30 percent, of the aggregate relative demand shift. In addition, the rate of skill upgrading has been greater in manufacturing industries that have seen a greater degree of outsourcing to China.

Journal

American Economic ReviewAmerican Economic Association

Published: Dec 1, 2005

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